The Scottish parliament building: the children and young people (Scotland) bill would reduce the number of carers entitled to grants. Photograph: Murdo Macleod

Kinship carers – relatives or family friends who permanently care for children who would otherwise be in the care system – held a large demonstration outside the Scottish parliament last week. They are rightfully distraught that, despite years of campaigning for recognition and support for the vulnerable children in their care, the Scottish government is planning to reduce, rather than increase, their right to assistance.

The children and young people (Scotland) bill sets out a new legal status called a kinship care order, which the government claims will finally recognise kinship carers in law and increase the support they are offered. However, a closer look at the proposals reveals they are billed as saving the Scottish government and local authorities money by reducing the number of kinship children with "at risk" or "looked after" status, which entitles them to crucial services and financial allowances. The financial memorandum of the bill states that only a fraction of those applying for the new kinship care order are expected to be entitled to start-up grants, the legal cost of applying for the order or a basic allowance to support their caring role.

Each kinship care placement costs the taxpayer between zero and £7,000 a year in Scotland (depending on where carers find themselves in the postcode lottery of support, and which legal status they manage to obtain). The average cost of foster care is £23,470 a year and residential care can cost £208,000 a year, according to Buttle UK's report.

Listening to kinship carers' stories at our local support groups every week, or in emotional late-night phone calls, can be sad and distressing as well as touching. Kinship carers, who are mostly women, often have to deal with children's mental health issues, bereavement or addictions, and the poverty and hardship that results from giving up jobs to take in grandchildren or nieces and nephews. They feel unconditional love for the children in their care and the sacrifices they make to keep them safe and happy.

But even more upsetting is the stigma and discrimination kinship carers face – when they are told they are not entitled to support, or the children's behavioural difficulties are blamed on bad parenting, or when kinship children get excluded from school without an understanding of the traumatic root causes of their challenging behaviour.

Amy (not her real name) tells of the potential hardship of kinship care: "When I got my grandson Joe I had a phone call from social workers to tell me to bring clothes and a car seat to the hospital. That was me getting my grandson. Joe was one of the longest on detox babies – it was six months. I had to take him to hospital every Friday morning for him to be examined, and then go back at 5 o'clock for his medication. I was 62 at this time and I had to pay for taxis back and forward myself. I couldn't afford it as I was getting pension credit. I got no help from social work. When I applied for the residency order I had to lay out £3,000. My life became hell between panels and meetings."

There is plenty of academic research on the benefits of keeping children in the stable and loving care of family members rather than in foster or residential care, and on the prevalence of attachment disorder, separation anxiety and other neurological issues affecting children who have suffered early-life traumas and parental separation.

The lack of support for kinship carers is unjust and counterproductive, as it is a disincentive to others to become kinship carers for vulnerable children in their family, increasing the need for foster and residential care services.

Last December, Scotland's kinship carers ramped up their long-term campaign for basic recognition and support by forming the Scottish Kinship Care Alliance, a national umbrella body that brought together all the support groups across Scotland in a unified voice to demand better from those in power.

There is great anger at the Scottish government's moves to reduce, or fail to increase, vital provisions, but there is also great determination not to be sidelined and ignored, but to fight hard for the rights of our kids who have already suffered so much. After all, they are not just ours, but the future of Scotland and the world.